Hong Kong has been named one of the least affordable housing markets in the world along with Amsterdam, Auckland and Vancouver in a study that showed housing affordability has shrunk considerably worldwide. Hong Kong saw real price growth of homes surge 37.6 per cent over the past five years up to September last year, with growth in real disposable household income edging up a mere 3 per cent in the same period, according to international property consultancy Knight Frank’s Global Affordability Monitor released on Tuesday. But that still put Hong Kong behind Amsterdam and Auckland in Knight Frank’s survey, which considered the ratio of home price to income, rent as a proportion of income and real price growth of homes compared to real income growth. “Across the 32 cities covered, there was an average five-year real house price growth of 24 per cent, while average real income grew by only 8 per cent over the same period,” according to Knight Frank’s report. “Amsterdam, Vancouver and Auckland saw real house prices outstrip real income growth by 59 per cent, 46 per cent, 32 per cent respectively.” But some cities still had real income growth higher than price growth of homes, such as New York and Moscow and Singapore, the study noted. The report came after consultancy Demographia last week ranked Hong Kong’s property market as the world’s least affordable for the ninth consecutive year. Analysts change their tune, forecast an up to 15 per cent increase in Hong Kong home prices this year Moreover, analysts from CLSA and Citibank said recently that Hong Kong’s home prices could rise by about 10 per cent from April to December, after falling by some 10 per cent following a 28-month rally that ended last July. Knight Frank said the issue of housing affordability could dampen the ability of cities to attract workers and companies, and analysts said better policies would be necessary to boost affordable housing. The report attributed the trend to urbanisation, which attracts both young and old to cities, homes being traded as commodities, higher taxes and more favourable policies for private property developments, incumbent homeowners’ resistance to new affordable housing and strangling supply. Knight Frank warned that high living costs can limit the opportunity of workers to relocate to more productive areas, leading to the missed opportunity from unfilled positions or not attracting the most suitable candidates, and businesses may need to compensate top talent by paying higher wages to offset the higher costs of living. “The daunting reality for city leaders is this: businesses are more mobile than people, when they cannot attract the right talent, or it costs them too much to do so, they may move to lower cost areas,” the report said, citing Amazon’s decision to have its second headquarters in two cities – Long Island City, New York and Arlington, Virginia – instead of expanding in Seattle. Hong Kong developers finished building 21,000 new homes last year, most in 14 years and ahead of official target Governments should prioritise affordable housing and could learn from Germany’s rental control, which ensures that people on the lowest incomes are not stung by rental price increases, said Alexander Boether, head of sustainability and responsible investments at property consultants Ziegert Group. Singapore has been successful in providing affordable housing, with the Housing and Development Board’s 1.2 million flats housing over 80 per cent of the Singaporeans, said Debra Ma, senior development manager at international property and infrastructure group Lendlease. Judith Salomon, head of strategic planning for The Berkeley Group, said greater and faster release of public land and more use of low-quality and accessible green belts for building homes is also necessary.